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Treats Are Trending

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NEW YORK — Treats are trending. Consumers rank perennial specialty food favorites cheese and chocolate among their top five picks, plus ice cream and frozen desserts; coffee, and cookies, brownies, cakes and pies.

Specialty food is drawing a new crowd this year. Men are stepping up purchases, less affluent shoppers are buying a wide variety of products like artisanal cheese and single-origin chocolate, and millennials are showing their age at the store.

These are some of the findings of new consumer research from the Specialty Food Association with Mintel International. Specialty food consumers report spending one in three food dollars on specialty food, up from one in four in 2014. This comes as specialty food sales topped $100 billion for the first time in 2014 and continue to grow, according to the research.

For the first time since this research began in 2005, men have surpassed women slightly as most likely to purchase specialty food. The prized millennial consumer is starting to get older, and those pushing 40 are spending more on meal ingredients than the snacks and treats favored by the younger set.

Consumers with annual incomes of $75,000 are twice as likely as those earning less than $50,000 to be specialty food buyers, yet the less affluent are buying the same wide range of specialty foods.

“As the market grows, the specialty food consumer is evolving,” said Denise Purcell, head of content for the Specialty Food Association. “There are opportunities for food makers and retailers to grow their businesses by appealing to new audiences and changing needs.”

These findings are based on an online survey conducted in July 2015 of 1,683 adults aged 18 and above.

Highlights:

  • Core specialty food consumers are ages 25 to 44 with household income of $75,000 and above and live on the East or West Coast.
  • Specialty food consumers spend $113 per week on food they prepare at home, up from $92 per week in 2014.
  • 52% of specialty food consumers say they purchase specialty food online. Nearly one third said they are looking for an online delivery service.
  • Millennials favor convenience: they shop in the broadest range of retail outlets and spend the most on takeout and ready-to-eat meals.
  • About one in three specialty food dollars are spent on products with an all-natural or organic claim.
  • 43% of those surveyed said they try new specialty foods to eat foods that avoid artificial ingredients and preservatives.
  • 71% of specialty food buyers use their phones for grocery and restaurant activities.

ABC, VP Partner With CBE on POS Financing

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KINGSTON, N.J. — Allied Brand Capital (ABC) and VP Racing Fuels have jointly announced a partnership with CBE Inc., one of the largest distributors and installers of Verifone POS systems in the country, to offer savings on the new RubyCi, the latest point-of-sale (POS) solution offering from Verifone.

“Verifone’s RubyCi POS system is EMV-ready and offers cost-effective, end-to-end payment solutions whether you’re a single island gas station store or a multi-island gas and convenience store,” said Michael Cerminaro, president of Allied Brand Capital.

“ABC’s program with CBE offers substantial discounts on both RubyCi and Commander POS equipment along with financing for up to 100% of the cost of the equipment including the site survey, installation and sales tax. With petroleum retailers facing an October 1, 2015 deadline to be EMV compliant inside their store, this program can go a long way toward helping them meet the requirements,” Cerminaro added.

The RubyCi system is equipped with a functional site controller included in one piece of hardware providing fast, efficient, complete store management. The combination of POS and site controller makes this “all-in-one” solution the only one of its kind in the marketplace, giving petroleum retailers the ability to consolidate as well as upgrade their operating technology at the same time.

ABC’s program requires a one-page loan application that CBE will assess to customize a solution.

The preferred lending partner of VP Racing Fuels, Allied Brand Capital has been instrumental in supporting the rollout of VP’s retail branding program.

“ABC is an important element of our program as it provides innovative financing solutions for our retail partners who are looking for alternatives to deal with the cost of reimaging, equipment and EMV compliance requirements,” said Alan Cerwick, president of VP Racing Fuels.

CBE, Montgomery, Ala., is a single-source technology provider of POS and other systems.

San Jose, Calif.-based Verifone connects 27 million payment devices to the cloud—merging the online and in-store shopping experience and creating the next generation of digital engagement between merchants and consumers. The company has clients and partners in more than 150 countries, including well-known retail brands, financial institutions and payment providers.

Gas stations and convenience stores that join San Antonio-based VP’s retail branding program also distribute VP’s other product lines, including ethanol-free VP Small Engine Fuels, formulated for two-cycle and four-cycle outdoor power equipment; VP Madditive performance chemicals; VP PowerWash and more. VP also markets VP PowerMaster hobby fuels for radio-controlled (R/C) racing.

Allied Brand Capital, Kingston, N.J., is a specialty equipment finance company focused on the retail and wholesale petroleum industry. It also provides financing to the car wash equipment market and in support of fast-food franchises, including the financing of franchise fees and related foodservice equipment. ABC has developed specific vendor financing solutions to assist petroleum retailers with their Europay, MasterCard and Visa (EMV) migration plans and continues to announce new equipment manufacturer and distributor partnerships.

Tyson Foods, NACS Give to Las Vegas Food Bank

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SPRINGDALE, Ark. — Tyson Foods Inc. and the National Association of Convenience Stores (NACS) donated a truckload of protein September 28 to Three Square Food Bank in Las Vegas to help eliminate hunger in southern Nevada.

Three Square, which serves Clark, Esmeralda, Lincoln and Nye counties, will distribute the donated food through its service network of agency partners including nonprofit and faith-based organizations.

With this donation, Tyson Foods has provided nearly 470,000 pounds of product to Three Square throughout the years.

“Protein is a precious resource to a food bank and often is hard to come by due to higher costs,” said Brian Burton, CEO and president of Three Square Food Bank. “The contributions of companies such as Tyson Foods allow us to carry out our mission of providing wholesome food to hungry people, while passionately pursuing a hunger-free community. We are extremely grateful for this generous donation, which will be distributed to food-insecure individuals in southern Nevada.”

With September being Hunger Action Month and the annual NACS Show—one of the Top 40 largest trade shows in the United States—just two weeks away, this is the perfect time for this donation, said Jeff Lenard, vice president of NACS’ strategic industry initiatives.

“Convenience stores are closely tied to the communities they serve, especially around charitable giving. Our industry donated close to $100 million last year to local charities and we are delighted to work with these great partners to give back to Las Vegas,” Lenard said.

Tyson Foods’ “KNOW Hunger” campaign is focused on helping more people understand and join the effort to eliminate hunger in America. The company partners with Feeding America, Share Our Strength and Lift Up America to raise awareness and help feed the hungry across the nation. Since 2000, Tyson Foods has donated more than 100 million pounds of protein in the United States.

Earlier this month, Tyson Foods announced its renewed commitment to hunger relief by pledging $50 million in cash and in-kind donations over the next five years in the fight against hunger, with a special focus on innovative initiatives at the local level.

“Partnering with organizations like Three Square Food Bank and NACS is important to us in raising awareness about food insecurity in communities all around the U.S.,” said Kevin Miller, senior marketing manager for Tyson Foods. “In this community alone, Three Square distributes more than 34 million pounds of food and product each year. We’re honored to get to be a part of that.”

Tyson Foods Inc., Springdale, Ark., is one of the world’s largest producers of chicken, beef, pork and prepared foods that include leading brands such as Tyson, Jimmy Dean, Hillshire Farm, Sara Lee, Ball Park, Wright, Aidells and State Fair.

Attorneys General Seek FDA Action on E-Liquid Warning Labels

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ALBANY, N.Y. — New York Attorney General Eric T. Schneiderman, together with the attorneys general of Illinois and Indiana, co-sponsored a letter to the U.S. Food & Drug Administration urging the FDA to require appropriate warning labels on liquid nicotine, nicotine-containing e-liquids and novel tobacco products such as dissolvables, lotions, gels and drinks.

The AGs also urge the FDA adopt or establish standards for child-resistant packaging for liquid nicotine and novel tobacco products. The letter was signed by 33 state attorneys general.

“As more and more Americans–especially young people–take up e-cigarettes, it is more important than ever that the FDA ensures our children are protected from the dangers of liquid nicotine,” said Schneiderman. “Child-resistant packaging and health warnings are an essential step to keeping these potentially lethal toxins out of the hands of our children. The FDA must step up and regulate the sale and packaging of these dangerous products before any more kids are harmed.”

Citing the American Association of Poison Control Centers, the AGs said that in 2014, 3,783 exposures to liquid nicotine nationwide were reported to poison control centers, a sharp increase from previous years.

“The unchecked growth of the e-cigarette industry has been accompanied by a correspondingly alarming increase in youth use of e-cigarettes,” the letter said. “This period of unregulated expansion has corresponded with a rapid escalation in accidental poisonings from exposure to liquid nicotine. Given the apparent growing popularity of ‘tank’-style vaping devices, which require periodic refilling with liquid nicotine by the consumer and some of which can generate enough heat to create carcinogenic compounds, public health threats from nicotine exposure will increase in the absence of appropriate FDA regulation.”

The letter continues, “Clearly, FDA action is warranted.”

In January, New York passed legislation requiring that liquid nicotine be sold in child-proof packaging; in July, following an investigation, Schneiderman announced agreements with four e-liquid manufacturers and retailers whose product was being sold in New York in violation of the new legislation.

The letter was signed by attorneys general of the following states, territories and District of Columbia: Alabama, California, Connecticut, Delaware, District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, New Hampshire, New Mexico, New York, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virgin Islands, Washington and Wyoming.

Click here to view the letter.

Growth Streak Continues for Automotive Aftermarket

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PORT WASHINGTON, N.Y. —  Old, new, clean, cool … Regardless of what phase a vehicle is in, a positive story continues to be told for various automotive aftermarket categories, according to The NPD Group.

Looking at the automotive aftermarket industry, the overriding fundamentals remain: people are driving more, the weather is favorable for maintenance and appearance, and the industry has experienced dollar growth for each month of 2015 thus far.

Whether it is an aging vehicle or brand new car, the categories supported by these vehicle segments are experiencing strong growth.

  • Old Car. Dollar sales of performance chemicals, a category traditionally driven by aging vehicle maintenance, grew 6% in August. Complete fuel system cleaners grew 8%, a major contrast to what has been seen over the past year. Other top-growing segments include power steering fluid, oil stabilizers and brake cleaners, which contributed a combined $1.2 million in growth to the category.
  • New Car. Unit sales reached 17.5 million for new cars in the 12 months ending August 2015, the highest level since 2005, which could be driving growth in the appearance chemicals category (+5%). This category includes scratch removers (+18%), detailers (+15%), carpet/fabric care (+13%) and protectants (+5%).
  • Clean Car. Up 12%, the air fresheners category ranked No. 1 for dollar volume growth in August. Vent/clip on fresheners grew 21% and contributed the bulk of the dollar growth.
  • Cool Car. Items within the refrigerants and accessories category were heavily promoted all summer. The category overall experienced an 11% lift in dollar sales. In particular, a/c charging kits grew 12% and contributed nearly half of the total dollar volume gains for the category in August.

The NPD Group, Port Washington, N.Y., provides market information and business solutions for areas including apparel, appliances, automotive, beauty, consumer electronics, diamonds, e-commerce, entertainment, fashion accessories, food consumption, foodservice, footwear, home, mobile, office supplies, retail, sports, technology, toys, video games and watches and jewelry.

Fermano Joins Brookwood as Controller for BW Gas & Convenience

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BEVERLY, Mass. — Brookwood Financial Partners LLC, a leading real estate investment and asset management company, has announced that Jennifer L. Fermano has joined the firm as a vice president and controller for BW Gas & Convenience LLC.

BW Gas & Convenience is an affiliated Brookwood entity that will acquire and operate gas stations with convenience stores in select regions of the United States.

Fermano will direct all financial and accounting aspects of Brookwood’s national portfolio of gas station and convenience-store properties. She will also be responsible for growing, training and supervising BW Gas & Convenience’s accounting staff as it expands along with the size of the firm’s portfolio.

“We are very excited to have someone with Jennifer’s management and accounting experience join our firm to lead the accounting team for our new strategy,” said Ericka L. Ayles, Brookwood’s director of finance. “Jennifer is an experienced retail accounting professional and we are thrilled to have her on board as we begin building our portfolio of gas stations and convenience stores in the coming months.”

Prior to joining Brookwood, Fermano was a senior controller at Aramark, a leading provider of food and support services to colleges and universities, where she developed and maintained an annual budget of $85 million for Boston University Dining Services & Retail Operations. She managed an additional budget for Aramark of $62 million for an 11-store convenience-store portfolio located in the Boston area. Previously, Fermano was CFO for 660 Corp., where she supervised the financial reporting process and led the implementation of a new retail accounting system for the firm’s portfolio of convenience stores.

Brookwood is a Beverly, Mass.-based private investment firm founded in 1993 that specializes in acquiring and managing commercial real estate and corporate securities on behalf of a select group of institutional and high net worth investors, family offices and trusts. Since its inception, Brookwood has invested more than $780 million of equity to acquire a portfolio of 187 assets with a realized and unrealized value in excess of $2.2 billion that has spanned multiple asset classes, geographical markets and industries across the United States.

C-Store Chain Launches Meal Kit Pilot

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BETHLEHEM, Pa. — Square One Markets, a convenience store in Bethlehem, Pa., has launched a pilot for a new dinner kit that allows time-starved customers to quickly prepare nourishing family meals in less than 30 minutes.

The all-in-one kits provide healthy options to consumers and eliminate three significant downsides to many popular meal-delivery kits: cost, packaging waste and the need to plan a day or more in advance to order them.

Square One Markets is selling The Six O’Clock Scramble Fresh & Fast Family Dinner Kits, developed by The Six O’Clock Scramble, a company that offers fresh and fast family dinner solutions. The dinner kits provide all-in-one meal ingredients and recipe cards that contain everything time-stressed families need to prepare a meal. They sell for around $20 and are designed to feed a family of four. At $5 per person, the dinner kits are less than half the price of meal-delivery services and without the packaging waste and carbon footprint from shipping.

The kits also will feature some locally grown and produced ingredients from the Bethlehem area.

Click here to view sample menus.

Square One Markets and The Six O’Clock Scramble worked with the Project on Nutrition & Wellness (PNW) and the National Association of Convenience Stores (NACS) to develop the family dinner kits.

The September 30 launch at the Square One Markets store features cooking demonstrations and recipe sampling from noon to 6:30 p.m. featuring the creator of the dinner kits, cookbook author, Today show contributor and The Six O’Clock Scramble CEO Aviva Goldfarb.

Square One Markets will offer the dinner meal solutions for the next 10 weeks as part of the pilot. It will offer a new meal each week, and the groups will survey customers to determine which meals worked best and why.

“Our customers are excited to be part of this pilot test and look forward to redefining convenience with these meal solutions,” said Square One Markets CEO Lisa Dell’Alba. “It makes so much sense to create this program for drivers already fueling up.”

“The evening hours are when families stress about dinner preparation plans. This evening rush is also the most popular time to buy gasoline. This is a great way to combine two trips into one,” said Jeff Lenard, vice president of strategic industry initiatives for NACS.

“Square One Markets, with nine convenience stores selling fuel in and around Bethlehem, Pa., is a perfect test for the national concept, especially with its full-service fueling and curbside delivery service at select stores,” said Julie Garel, director of the Project on Nutrition & Wellness

“As more families have two working parents and busy schedules, it can be a challenge to plan for healthy meals, let alone make an extra stop to purchase the ingredients. The Six O’Clock Scramble Fresh & Fast Dinner Kits provide a convenient and affordable solution for busy families, and gets them on their way quickly to a healthy family meal,” said Aviva Goldfarb, CEO of The Six O’Clock Scramble.

Families that want to cook more meals together but can’t say that the main reasons are busy schedules (43%) and they are too tired after school or work (31%), according to a new NACS consumer study conducted by Penn Schoen Berland. This dinner kit addresses both obstacles, the group said.

More than three in four consumers (77%) say that they would be interested in purchasing an all-in-one meal kit from a store. Convenience store customers are especially receptive: 85% of weekly convenience-store customers would purchase a dinner meal kit, according to the survey results.

The Project on Nutrition & Wellness (PNW), a program of the Convergence Center for Policy Resolution, leverages the knowledge, influence and resources of the public interest and private sectors to improve the nutritional health of the nation. PNW brings together individuals and groups–with expertise in consumer behavior, marketing, public health, nutrition education and public policy–to create a major, unified shift in demand for healthier foods and put market forces to work to address obesity, diabetes and other nutrition-related conditions.

Reynolds Preps for the Future

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NEW YORK — Cowen Co. recently hosted meetings with the management team from Reynolds American Inc., including the soon-to-be COO and president Deborah Crew, vice president of investor relations Morris Moore, and director of investor relations Bob Bannon.

“While only a few months since the acquisition closed, the opportunity for outsized market share gains for each of Newport, Camel and Natural American Spirit look encouraging,” Cowen analyst Vivien Azer wrote in a research note. “Reynolds now sits in the sweet spot of several shifts in consumer dynamics, while also positioned to capitalize on better retail presence, cost savings and leading brands in (moist smokeless) and e-cigs.”

Here’s some of the takeaways Azer had on Reynolds’ major cigarette brands and priorities moving forward:

The Newport Opportunity

“Early benefits of the Lorillard acquisition are already apparent, and in turn Newport’s share trends are already showing signs of acceleration,” Azer said, pointing to the fact that Newport’s share was up 0.5% year over year since July.Looking ahead to third-quarter 2015, Newport’s share gains are accelerating, which is encouraging.”

Azer added that Reynolds is preparing to transition its retail contracts, adding Newport to its Every Day Low Price (EDLP) program. Adding Newport will give Reynolds access to 48,000 retail outlets where it is not currently present, as well as access to the 50,000 retail outlets where Newport had contracts through Lorillard.

“This expanded retail opportunity remains somewhat restricted through 2016,” Azer said, citing the standstill agreement that was part of the merger, “as Reynolds is entitled to ‘only’ their fair share of retail space, after which the company can negotiate for outsized retail exposure.”

A Focused Approach for Camel

The potential addition of Newport’s retail network also stands to benefit Reynold’s existing brands, especially Camel.

“Prior to the addition of Newport, the Camel brand served multiple roles in Reynold’s portfolio, as it was a key competitor to Marlboro, but also aimed to be a key growth driver in the menthol category,” said Azer. “Reynolds will look to take a more focused strategic approach with the brand, while capitalizing on geographic white space opportunities (primarily in the East), as they leverage the Newport distribution network.”

“Looking ahead, we expect that the combination of Newport and Camel will position Reynolds well to continue consolidating market share with the adult smoker under-30 consumer, which is a key driver of future market share gains,” she said.

Evolving the Next Gen Portfolio

Currently, Reynolds estimates the e-vapor category accounts for approximately 5% of the total U.S. tobacco category, with 20% of the e-vapor market being disposables, 40% rechargeables and 40% vapor tanks and mods (VTMs). As such, the Reynolds team plans to expand its portfolio of next-generation products.

“With category trends evolving notably, away from e-cigs (in particular disposables) and into e-vapor, Reynolds’s multi-pronged approach positions the company well to capitalize on shifting consumer preferences,” Azer said. “Vuse is the No. 1 e-cig , while the company will soon have access to British American Tobacco’s e-vapor portfolio through their e-vapor collaboration agreement.”

“Reynolds remains our top pick,” said Azer. “Revenue synergies, cost savings and broadly advantaged market positioning position Reynolds well across a number of emerging consumer trends.”

Author(s): 
Melissa Vonder Haar

EDITORIAL: Vape’s Image Problem

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OAKBROOK TERRACE, Ill. — The second season of HBO’s True Detective drew criticism for plenty of reasons. It was poorly cast, scattered, with little of the magic chemistry carrying over from the first season. What I, however, took objection to was the frequency in which the series poked fun at Rachel McAdams’ character for puffing on an electronic cigarette, likening it to lewd acts with a robot.

It’s indicative of what I’ve come to view as vape’s larger image problem. From Julia Louis-Dreyfus puffing on an e-cig as part of a 2014 Golden Globes gag to College Humor naming electronic cigarette smokers as one of its “new breeds of d-bags,” vaping has somehow become synonymous with, well, jerkiness.

It’s kind of infuriating. Forget the fact that you’d never see someone using nicotine gum being chastised by the media. Forget the fact that shows like True Detective mock vaping but say nothing when a character is depicted smoking. What’s so problematic about the negative media portrayal of vaping is that, because this segment is so new, these e-cig gags could actually affect how consumers feel about the products—especially when there’s no shortage anti-e-cig voices telling anyone who will listen about the evils of vaping.

I’ve watched firsthand the leeriness of my friends when someone pulls out an e-cig. At best, they’re noticeably uncomfortable about vaping going on in such “close” proximity; at worst, they’re vehemently questioning if e-cigs are really any better for you than smoking.

These are stereotypical millennial, urban-dwelling, Whole Foods-shopping, techies I’m talking about: the exact segment vaping should most appeal to. If they’re questioning the segment, we’ve got a big, big problem.

So what can we, as an industry, do about this? Unfortunately, I’m not sure the retail side can do anything about the questions on health and safety. Sure, education can happen on the store level. But until there are some regulations on the segment, some recognition from the U.S. Food and Drug Administration (FDA) that e-cigs indeed fall drastically lower on the spectrum of risk than combustible products, I fear we’ve hit our limit on how much retailers can truly educate the public at large.

As for the image problem—the stereotype of the tattooed, snobby, outsider toting a five-pound tank and five bottles of designer e-liquids—I truly believe the presence of national retail chains in the segment is helping to alleviate some of that. Not to trash vape shops and some of their clientele, but the fact that well-known operators like Walmart or 7-Eleven are in the game proves that vape is not just for this niche segment of the population, as some of the latest media portrayals would lead you to believe.

Even if vape hasn’t yet fully reached the masses, the fact that it’s available (and selling) at convenience stores—the channel for the masses—suggests its mainstream potential.

In other words, keep fighting the good fight.

Author(s): 
Melissa Vonder Haar

Four Ways to Appeal to Millennial Drinkers

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CHICAGO — Nearly three in 10 adults in the United States are millennials and of legal drinking age. The sheer size of the millennial generation, (born between 1977 and 1992), makes it a crucial demographic for the adult-beverage industry.

“In many ways, millennials are ideal adult-beverage consumers,” said Donna Hood Crecca, senior director at Technomic, noting the results of a recent report, 2015 Special Trends in Adult Beverage Report: Millennials. “They are open and willing to learn about new styles and flavors of beer, wine and spirits. They are frequent consumers in many retail and restaurant settings, where they balance exploration and trial with loyalty to a few favorite brands that deliver on flavor, quality and price.”

The report is part of Technomic’s Trends in Adult Beverage series and provides key demographic information about this generation and in-depth analysis of millennials’ interactions with adult-beverage categories, brands and suppliers. The report provides insights and actionable implications around Millennials’ alcohol purchases on-premise and at retail.

Some key findings from this follow-up study show how catering to millennials’ thirst for adult beverages can tap maximum profits for retailers, restaurant operators and bar proprietors.

  • Equal opportunity imbibers: Millennials are likely to purchase adult beverages at a variety of retail and on-premise venues. This group is also open to engaging in all three adult-beverage categories—spirits, wine and beer—as well as a range of different types and flavors of alcohol drinks.
  • Age brings sophistication: As millennials age, they are more inclined to buy craft beer and to have a more evolved palate for exploring different varietals and regions of beer and wine.
  • A propensity to drink multiple types of adult beverages on a single occasion: 30% of millennials consumed more than one type of drink on their most recent on-premise occasion. Primary reasons for switching were a desire to experiment with different beverages or flavors or to try a new drink.
  • Balancing adventure and loyalty: Historically adventuresome in their drinking habits, millennials continue to explore, especially in on-premise settings, as they mature. They transfer their new discoveries from restaurant experiences to their retail buying decisions while also balancing curiosity with loyalty to some tried-and-true brands.

Chicago-based Technomic, a Winsight company, delivers a 360-degree view of the food industry. It drives growth and profitability for its clients by providing the most reliable, consumer-grounded, channel-relevant data with forward-looking strategic insights. Its services range from major research studies and management consulting solutions to online databases and simple fact-finding assignments. Its clients include food manufacturers and distributors, restaurants and retailers, other foodservice organizations, and various institutions aligned with the food industry.

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